The government is for the Russians: We need a dollar of 65, bear it
An interesting statement was made by the head of the Russian Ministry of Finance, Anton Siluanov:
It turns out that a weak ruble, beating Russian wallets and businesses compelled to purchase imported equipment, is the work of the government itself and the Central Bank. According to Anton Germanovich, the so-called budget rule is mainly aimed at ensuring the predictability of the national currency.
Recall that the budget rule was invented by Alexei Kudrin as Minister of Finance back in 2004. According to this financial rule, state excess profits from the sale of hydrocarbons were “sterilized” by cutting them off at a certain level of oil prices. The government “cut off” the opportunity to spend these funds on the country's needs, putting them into the Stabilization Fund. According to some reports, up to three quarters of excess profits were withdrawn from the Russian economics into this financial structure.
Critics of Cudrinomics pointed out that American securities were bought with money not used in Russia, actually financing the construction of infrastructure and the US military-industrial complex, and considered this a manifestation of neocolonialism. Her supporters argued that this method of conservation is the most reliable. In the crisis year of 2008, the Stabilization Fund was divided into the Reserve Fund and the National Welfare Fund. In January it became known that the government had completely spent all the resources of the Reserve Fund and further the budget deficit would be covered from the funds of future generations.
Opponents of the economic policy Governments propose abolishing or amending the budget rule. For example, the Federation Council announced a proposal to the Ministry of Finance to introduce a floating cut-off price, according to the formula, the price of a barrel minus $ 25. Academician of the Russian Academy of Sciences Sergei Glazyev generally proposes to move away from the vicious liberal model and turn to the experience of the PRC. There, super-profits are directed to infrastructure investment: highways, railways, and ports are being built. Russian money should be invested in Russian projects and infrastructure.
However, Anton Siluanov opposes such initiatives, all oil surplus profits will continue to be hidden in the pillow. Moreover, regulators are hiding from the country's population what exactly this money will be invested in.
- said Elvira Nabiullina.
A cheap ruble is beneficial to the government because budget revenues are tied to foreign currency, while domestic expenses are not, but disadvantageous to ordinary Russians, since imported goods are getting more expensive. In order to fulfill its obligations, the state cuts expenses by increasing the retirement age, and increases revenues by increasing taxes and external borrowing. Given the preservation of the budget rule, this does not give any reason to expect breakthrough growth.
If there were no budget rule, then the ruble would now have a ratio of about 1 dollar to 50 rubles to the price of a dollar
It turns out that a weak ruble, beating Russian wallets and businesses compelled to purchase imported equipment, is the work of the government itself and the Central Bank. According to Anton Germanovich, the so-called budget rule is mainly aimed at ensuring the predictability of the national currency.
Recall that the budget rule was invented by Alexei Kudrin as Minister of Finance back in 2004. According to this financial rule, state excess profits from the sale of hydrocarbons were “sterilized” by cutting them off at a certain level of oil prices. The government “cut off” the opportunity to spend these funds on the country's needs, putting them into the Stabilization Fund. According to some reports, up to three quarters of excess profits were withdrawn from the Russian economics into this financial structure.
Critics of Cudrinomics pointed out that American securities were bought with money not used in Russia, actually financing the construction of infrastructure and the US military-industrial complex, and considered this a manifestation of neocolonialism. Her supporters argued that this method of conservation is the most reliable. In the crisis year of 2008, the Stabilization Fund was divided into the Reserve Fund and the National Welfare Fund. In January it became known that the government had completely spent all the resources of the Reserve Fund and further the budget deficit would be covered from the funds of future generations.
Opponents of the economic policy Governments propose abolishing or amending the budget rule. For example, the Federation Council announced a proposal to the Ministry of Finance to introduce a floating cut-off price, according to the formula, the price of a barrel minus $ 25. Academician of the Russian Academy of Sciences Sergei Glazyev generally proposes to move away from the vicious liberal model and turn to the experience of the PRC. There, super-profits are directed to infrastructure investment: highways, railways, and ports are being built. Russian money should be invested in Russian projects and infrastructure.
However, Anton Siluanov opposes such initiatives, all oil surplus profits will continue to be hidden in the pillow. Moreover, regulators are hiding from the country's population what exactly this money will be invested in.
Where we invest, we give with a lag of 6 months. This is the policy of the Central Bank.
- said Elvira Nabiullina.
A cheap ruble is beneficial to the government because budget revenues are tied to foreign currency, while domestic expenses are not, but disadvantageous to ordinary Russians, since imported goods are getting more expensive. In order to fulfill its obligations, the state cuts expenses by increasing the retirement age, and increases revenues by increasing taxes and external borrowing. Given the preservation of the budget rule, this does not give any reason to expect breakthrough growth.
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